"I've
got your picture,
I've got your picture,
I'd like a million of 'em around my cell "–
The Vapors, Turning
Japanese

Your
intrepid tech reporter has crossed the big pond to Japan
for a 5-day stay in Tokyo and Kobe. I was invited as the
keynote speaker to the Think Canada trade mission for
early-stage Canadian wireless companies. The entire show
was done by the Canadian Consulate in Tokyo and it was
well attended with over 120 members of the Japanese
investment industry and/or corporate development arms of
large Japanese multi-nationals.

I'd
like to share with you some of my experiences and help
you and your company understand how to take advantage of
a federal government that is committed to helping your
business increase its exports in technology based
businesses.

First
of all, Japan is not scary for the average uni-lingual
Canadian hick. The people are the most polite in the
world and most understand English or the second language
of the gaijin business traveler, charades (Pictionary
works well too). Watching three of us try to order
dinner in a side street restaurant must have looked to
an outsider like Party Game (everyone under 34 missed
that last joke). In all seriousness, Japan is very
friendly for those accustomed to North American culture.
Here are some minor, but notable differences:

· They drive on the wrong side of the road like the
Brits

· Contrary to the popular 80's song, domo arigato
is not "thank you" and shortening it to just domo
enlists blank stares or giggling. Arigato gozaimasu
is the proper way to thank the bellhop/waiter/taxi
driver etc. (Note to self: send the Styx Fan Club a
nasty letter)

· Everyone is thin. There are no Denny's, Pizza Hut or
Jack in the Box. Correlation?

· Business is conducted frustratingly slowly because
the Japanese are unfailingly polite and listen so well
in meetings only asking questions later after everyone
relaxes over beer and sake. You must have a well-trained
liver to accelerate business in Japan. If you are a one
drink drunk, this is not a good place for you.

· If you are over 6 feet tall, one word: duck.

· Like the Swiss (or maybe the Swiss are like the
Japanese), everything runs on time and it runs well. The
transportation system is second to none in the world. If
the Japanese transit workers went on strike, the economy
would cease.

· If you were to ever ask Ridley Scott what his
inspiration was for the setting of Blade Runner,
just walk the streets of Shinjuku (part of Tokyo). It is
clean, but the neon, the bustle and the narrow streets
and tall buildings of every shape give it an alien city
look.

· Japan is one big reason the tobacco industry might be
a safe investment these days. The restaurants and trains
do have non-smoking sections, though.

The
reason that eight companies and I were invited to Japan
was to talk wireless. This country is obsessed with cell
phones. How obsessed? You have NO idea. You will not
believe it until you see it. Quick, count how many
people you know in North America with WAP enabled phones
or any other way to reach the Internet. Now how many of
those actually use the service to a) receive/send
instant messages b) receive/send e-mail c) find
information (weather, stocks, restaurants, movies) d)
transact anything e) listen to MP3s f) play games
interactively... in colour. Since WAP services are
actually used by 0.5% of the North American people that
have cell phones, I'm guessing you said nobody that you
know. If you are between 15 and 34 in Japan, you did all
of those things in any given train ride or on any given
street corner because 90% of the people in that age
group have an I-mode enabled phone. Before we even get
to the absolutely cool things that you can do with
I-mode in North America, they are releasing Java phones
in Japan this summer for even more possibilities. They
are two cool revs ahead of us.

Most
of what I have talked about is consumer oriented. The
cellular phone companies make it fairly inexpensive to
use packet data (Internet and messaging) for the end
user because they charge by the kilobit. If you don't
want to use it, you don't pay. Now, the Japanese
business man, with at least 45 minutes each way on a
train commuting everyday, is getting more productive
with e-mail. Soon, access to corporate data and
documents will be rolled out. Now I know that you are
wondering about the tiny screens, but it is truly
amazing what they can cram onto these screens now. Also,
the kanji script is space effective, so Japanese writing
is compressed when compared to ours. Did I mention the
colour screens? Animation, photos and video coming soon.
A Canadian company, Plazmic out of Toronto, has all of
its business in Japan and is rolling out a downloadable
Java app that is like Shockwave for a cell phone. The
demo blew me away.

We
are miles behind the Japanese in wireless usage, but a
few companies in Canada seem to get it and they are
giving it to the Japanese. I have a big suggestion for
any Canadian company in the wireless business with
applications for cellphones or PDAs: get to Japan fast.
Call the Canadian consulate in Japan and have Avi
Salsberg set you up with the movers and shakers in the
industry (more about the Foreign Affairs gang later). It
only makes sense to sell to a ready market and learn all
you have to about it before the rest of the world
catches up. There are three main reasons that the
Japanese have come to lead the world in wireless
innovation (and these might be instructive in
understanding how long it will be, if ever, before North
America catches up):

1. The Japanese have a gadget culture. They love
electronics.
2. They travel to and from work on trains, creating lots
of down time while they are moving. Thus, wireless works
extremely well.
3. The Internet charges for wireline dial-up are
exorbitant because they do not have free local calling.
The result is 29% of Japanese have a PC at home, while
60% of Canadians do.

Eventually,
we will have mobile devices (and networks) in North
America that will be similar in function and form to
those already populating Japan. But we need to look to
the Japan experience and learn from it while it is
happening. We also need to be aware that standards set
in Japan (I-mode, for example) may become world
standards because they are driving adoption. If you are
in the business of wireless hardware, software or
services, you need to make platform choices. Make sure
that you understand the Japanese platforms and
standards, as well as those in Europe.

As
for doing technology related business in Japan or any
other major city in the world, look no further than the
Canadian Department of Foreign Affairs. They have
dedicated people, like Avi in Tokyo, that network with
all of the top investment sources and corporate partners
in order to serve you and your technology company. On
this particular trip, it was wireless companies that
were presenting to an assembled throng. As I go to
print, each of these companies has had at least five one
on one meetings with Japanese investors or corporate
partners/customers. These private meetings came after
all day sessions where each company presented for 20
minutes.

While
the group responsible for providing the service of
setting up meetings (usually at the beautiful Canadian
Embassy) is your government, they can't serve everyone.
Avi and his gang need to know that you are a company
that has met with some scrutiny and usually won't be
able to help you unless you are at the revenue stage
and/or have some institutional investment (VC or
corporate) in your company.

The
Canadian Foreign Affairs machine is really amazing. The
United States, with its huge captive market, is not
aggressive on the export side at all. Many other G7
countries (UK, France for example) have aggressive
promotions about their exporting industries, but I have
not seen the level of effort in making connections and
relationships like the Canadians have been doing. Take
advantage of our international network. It is not as
scary entering a foreign country to do business when you
have someone working ahead of you, for you, making all
of the necessary preparations.

Letters
From Last Time –

First, some kudos from last time:

I am a lawyer with experience in the wireless software
start up world here in Vancouver. You have bang on
described my experience in terms of trying to persuade
clients what not to do when getting their start ups
launched. I don't understand why people insist on going
ahead with their "funny" deals, but they do.
It becomes tiresome for a guy like me to try to persuade
them not to do those things. It is great when someone
who is not a lawyer says the kinds of things you have in
this article, so... Thank You. I am going to frame it.

Frederick Margel

Hi Brent,

You may remember me saying that I've no desire to be a
businessman, yet I'm learning more from your columns
than I ever did from the books available. Sometimes a
plank in the head is necessary to get a point across.

Roger Brown

Brent,

I enjoyed your article last week. I think that it
offered some of the best advice I have seen recently...

Greg Celmainis

Brent - I love the part about what NOT to do in
financing a start-up. Dave Wedge and I see a lot of
friends and families come in with tons of small
shareholders and have heartburn over it. Very tough to
undo if they get to us with that kind of share
structure. It's one thing to hear it from us. It's
another if you sing it. Thanks!

Lee Lau

Brent, your article could not have been better-timed.
Yesterday here in Nanaimo, I sat in a meeting with tech
business owners, several start-ups, and four Industry
Canada reps from the Information & Communication
Technologies Branch in Ottawa and Victoria. They were on
a fact-finding mission to see how Industry Canada could
better help Canadian businesses.

Bottom line from the entrepreneurs' perspective was they
needed more financial support. From my perspective
however these entrepreneurs need to be more
business-sophisticated. You were bang-on that the
company must have a strong management team - this is a
huge problem in communities outside of Victoria and
Vancouver, where our inventors (usually near-to-exiting
resource-based companies), struggle to locate and hire
business managers willing to apply years of experience
for less-than-stellar pay.

I will be distributing your article to a few colleagues
today.

Marilyn Hutchison

Now, a letter taking some issue with
my thesis on management from the same column:

Hi Brent,

I'd like to offer you a slight revision to your
"issue 1" regarding startup in your May 25th
T-net article. It's "leadership, leadership,
leadership" that is missing. The problem is that we
have too many people that think that they are capable of
being an executive without understanding what it means
to be a leader. That is, most do not comprehend the
significance between leadership and management. If
anything, there is a glut of "managers" in
Vancouver and a severe lacking of leaders - hence the
lack of market focus and market understanding. The sign
of a poor management team is that it can't self assess
itself to realize that they are lacking leadership and
consequently fail to hire it or yield to it if someone
in their organization demonstrates it. It's a sign of
maturity. You mentioned companies like Creo. It
succeeded because it understood that it takes good
leadership, first, to succeed. That's why it was able to
re-invent itself.

Mark Heieis

I definitely see your point and would
augment what I was saying about domain knowledge,
intimate customer knowledge and experience at building
products or services for the same market that the
start-up is entering. Leadership is what gets you beyond
the product development stage and helps you build a
company. Leadership is what it takes to make the tough
decisions when changes in the road occur. I probably
needed to be more clear, but I was referring to the
earliest stages of company formation and the teams that
decide to work together to build something new. That is
where the anchor companies and the experience that
people gain from working for them come in very handy.
Thanks for your letter.Seems
hypocritical, yes. I was part of a TV show on Brain
Drain a couple of years ago and one of the prominent
speakers was an SFU professor. He was lamenting the
brain drain while at the same time being sympathetic to
the individual that was looking for opportunities and
wealth elsewhere. While there is something to be said
for offering market-driven services (if they all want to
leave, then we might as well help them), I think most of
us would like energy spent on what would make them stay
or come back to Canada once they are down there. Thanks
for the great heads up.

Something Ventured is a bi-weekly column designed
to supplement the T-Net British Columbia web site with
some timely, relevant and possibly irreverent insight
into the industry. I hope to share some of the
perspective and trends that I see in my role as a VC.
The column is always followed by feedback (if its
positive or constructive. I'll keep the flames to
myself, thanks).